The Strategist

Varoufakis: Greece Has no Printing Presses to Issue Drachmas

07/02/2015 - 16:21

Greece cannot return to print drachmas, as the country no longer has relevant printing machines, said Finance Minister Janis Varoufakis.

El Desperttador (youtube)
El Desperttador (youtube)
According to Varoufakis, in 2000, when Greece joined the euro area, the authorities were quick to get rid of the print machines, because they were convinced that now the country will always be in the back of the single European currency.

- We destroyed all the machines - now we have nothing, - said Varoufakis in an interview to Australian radio station ABC.

Earlier it was reported that the return of Greece to the old national currency is possible in case of leaving the euro zone because of disagreement with the European Union terms.

Experts fear that the reanimated Drachma may quickly begin to lose value, what would lead to the danger of inflation, as import prices will rise.

There also may be difficulties with the financial side of contracts when settling in different currencies.

June 30, Greece had to pay 1.6 billion euros to the IMF, but this has not happened.

Greek Prime Minister Alexis Tsipras has called for a referendum in which Greek residents must decide whether to accept or not to accept the claims of creditors.

July 1, Financial Times reported that the Greek Prime Minister Alexis Tsipras sent a letter to the European Commission, the ECB and the IMF, where he has agreed to take almost all the conditions proposed by the lenders.

Earlier, Alexis Tsipras said that if the people of the country vote in a referendum for the creditors to accept the terms, he will be forced to retire.

Today, Finance Minister Janis Varoufakis also said that if the Greeks choose "yes" in the referendum, he will resign. In his blog, he is trying to prove that Greece can remain in the euro area and thus vote against the proposal of the creditors. He recommends to vote against the creditors’ proposal, reinforcing his recommendation by following six reasons:

1. Negotiations reached an impasse, as the lenders of Greece
(a) Refused to reduce the national debt, which cannot be repaid
(b) Insist that the debt must be paid "parametrically" most poor population stratum, their children and grandchildren.

2. The IMF, the US government, the governments of many other countries around the world and the majority of independent economists - apart from Greece - believe that the restructuring of the debt is necessary.

3. Previously (in November 2012), the Eurogroup agreed that it is necessary to restructure the debt, but it refused to take measures for its restructuring.

4.From the moment the referendum was announced, official Europe is sending signals that they are ready to discuss debt restructuring. These signals show that the authorities in Europe could also choose "no" in their "final" offer.

5.Greece to remain in the Eurozone. Deposits in Greek banks are safe. Lenders have chosen the blackmail strategy based on the banks closing. The difficult situation, in which we find ourselves, was caused by the choice of lenders (not the Greek government) to stop negotiations due the idea of the Grexit and the devaluation. Greece’s place in the euro zone and the European Union is beyond doubt.

6. The future demands proud Greece to remain in the euro area and in the heart of Europe. The future requires Greeks to say "no" in the Sunday referendum to stay in the euro area, and so again discuss the payment of Greek public debt.

Recall that on 5 July, the referendum where residents have to make